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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

The incredible inclusion of the investor-state disptue settlement regime in TAFTA was first revealed when the German blog Netzpolitik leaked the EU Council’s mandate
to the European Commission to negotiate the deal. This extreme system empowers corporations to circumvent domestic court systems and directly challenge a
government’s public interest laws before a three-person, extrajudicial tribunal if the corporations feel the laws affect their ability to make a profit. Corporations have already used the system to attack a slew of environmental and health policies, resulting in tribunal orders for taxpayers to pay more than $3.5 billion to foreign corporations under U.S. trade and investment deals alone.

The report outlines the lobbying efforts of corporations advocating
for the inclusion of investor privileges in the agreement. The U.S. Chamber of
Commerce said in a statement
to USTR that the investment chapter of the U.S.–EU trade pact should
serve as "the 'gold standard’ for other investment agreements.” Chevron has requested that TAFTA require governments to fulfill foreign investors' "expectations" and that such investor privileges cover “both existing and future investments." Chevron is intimately familiar with the investor-state system, having launched an investor-state case against Ecuador to avoid paying the $18 billion that Ecuadorian courts have ordered the company to hand over to clean up its mass-contamination of the Amazonian rainforest.

Corporations in the U.S. and
EU are already the most frequent (ab)users of the investor-state system, having launched cases under existing "trade" and investment deals to challenge important domestic regulations such
as green energy and medicines policies, bans on harmful chemicals, and
environmental restrictions on mining, among others.

The sheer number of cross-investing corporations in
the EU and U.S. increases the risk of investor-state disputes if TAFTA (also known as TTIP) would take effect. According to the report
:

“The
tremendous volume of transatlantic investment – both partners make up for more
than half of foreign direct investment in each others' economies – hints at the
sheer scale of the risk of such litigation wars. Additionally, thousands of EU
and US companies have affiliates across the Atlantic; under TTIP they could
make investor-state claims via these affiliates in order to compel their own governments to refrain from regulations they dislike.”

The inclusion of the investor-state system in this proposed U.S.-EU deal is even more incredible considering the ostensible premise for the extreme regime. The stated justification for empowering foreign corporations to completely circumvent a domestic legal system and have their case against a sovereign government heard by an extrajudicial tribunal of three private attorneys has been that some domestic legal systems are too ill-functioning to trust. That accusation is hardly one that either the U.S. or EU are likely to levy at each other. Again, from the report:

“One
of the usual arguments for investor-state arbitration – the need to grant legal
security to attract foreign investors to countries with weak court systems –
turns to dust in the context of TTIP. If US and EU investors already make up
for more than half of foreign direct investment in each others' economies, then
it is clear that investors seem to be happy enough with the rule of law on both
sides of the Atlantic.”

For more information about the dangers of the investor-state regime and its expansion through TAFTA, please check
out the full report.

Comments

It will be interesting as EU food inspection and regulations are 500% stricter than U.S.
e.g.: GM labeling required with most GM food banned in the EU and the list of banned ingredients... additives... far more extensive than in the U.S.